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President Obama on Monday signed two executive orders to protect gay, lesbian, bisexual and transgender federal contractors and employees from workplace discrimination.

The first order expands upon a memorandum issued by President Lyndon Johnson in 1965 that prohibited federal contractors from discriminating “against any employee or applicant for employment because of race, color, religion, sex or national origin,” to include sexual orientation and gender identity. Somewhat controversially, the order did not carve out an exception for religiously affiliated contractors. Instead, the White House pointed to an existing order issued by President George W. Bush -- which allows such contractors to consider an applicant’s religion when hiring -- as an adequate exemption for faith-based organizations.

In the weeks since Obama first announced his plan to issue the order, many religious groups have asked the president to include such an exception. However, many organizations, both secular and religious, spoke out against any exceptions, saying religious freedoms do not give businesses the right to “discriminate using taxpayer dollars.”

Obama expressed a similar sentiment at the White House signing ceremony Monday.

"America’s federal contracts should not subsidize discrimination against the American people," Obama said.

A group that represents hundreds of federal contractors said it supported the initiative, but noted most organizations doing business with the federal government have already barred discrimination based on sexual orientation.

“We shouldn’t lose sight of the fact that this action is a proxy for pushing for broader legislation and not because there is any evidence of a particular problem among government contractors when it comes to equality of employment or job performance,” said a statement by the Professional Services Council. “We sincerely hope others will follow the leadership of our industry in promoting equality, even without a federal mandate.”

A White House official has estimated the order will affect 24,000 companies that employ 28 million workers, about one-fifth of the nation’s workforce.

A second order aimed at federal employees expands previous guidance issued by President Bill Clinton that prohibited discrimination based on sexual orientation. The update prohibits discrimination based on an individual’s gender identity.

A 2009 Obama order prohibited the firing of federal workers for any reason other than job performance, and a 2013 Equal Employment Opportunity Commission ruling determined the 1964 Civil Rights Act gender protection provisions extended to gender identity. Still, the White House thought it important to explicitly prohibit discrimination against transgender workers.

The White House said the orders would address not just a moral problem, but also an economic one.

“At a critical time for our nation’s economy, we need all of our workers to be focused on making the most of their talent, skill, and ingenuity, rather than worrying about losing their job due to discrimination,” the administration wrote in a fact sheet accompanying the signing. “The economy functions best when workers are matched to the jobs with the best fit, maximizing their productivity, increasing wages and helping the bottom line for businesses. Discrimination is not just wrong, it also can keep qualified workers from maximizing their potential to contribute to the strengthening of our economy.”

The National Treasury Employees Union said it supported the measures, as it represented a step forward in making the federal government a “model employer.”

“Every employee should be treated with dignity and respect and deserves a workplace free of discrimination,” said NTEU president Colleen Kelley.

A May report from the Merit Systems Protection Board found gay federal employees will not be fully safeguarded under federal statute until Congress passes legislation guaranteeing their equal protection.

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